Vast oil reserve may be within reach, and battle heats up

Jeff Prude holds a stick with tar that naturally seeps from the ground dripping from it, in an area known as the McKittrick Brea Pit near Fellows, Calif.

Jeff Prude holds a stick with tar that naturally seeps from the...

FELLOWS, Calif. - Secure in this state's history and mythology, the venerable Midway-Sunset oil field near here keeps producing crude more than a century after Southern California's oil boom. Many of its bobbing pump jacks are relatively short, a telltale sign of the shallowness of the wells and the ease of extracting their prize.

But away from this forest of pump jacks, a road snakes up into nearby hills that are largely untouched - save for a handful of exploratory wells pumping oil from depths many times those of Midway-Sunset's.

These wells are tapping crude directly from what is called the Monterey Shale, which could represent the future of California's oil industry - and a potential arena for conflict between drillers and the state's powerful environmental interests.

At one such exploratory site, tall pump jacks stood above two active wells on a small patch of federal land. For now, the operator, Venoco, has been storing the oil in two large tanks, but construction is to start soon on pipelines and more wells are planned.

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Comprising two-thirds of the U.S.' total estimated shale oil reserves and covering 1,750 square miles from Southern to Central California, the Monterey Shale could turn California into the nation's top oil-producing state and yield the kind of riches that far smaller shale oil deposits have showered on North Dakota and Texas.

For decades, oilmen have been unable to extricate the Monterey Shale's crude because of its complex geological formation. But as the oil industry's technological advances succeed in unlocking oil from increasingly difficult locations, there is heady talk that California could be in store for a fresh oil boom.

Established companies are expanding into the Monterey Shale while newcomers are opening up offices in Bakersfield, the capital of California's oil industry, about 40 miles east of here.

The Monterey Shale has also galvanized powerful environmental groups. They are pressing the state to strictly regulate hydraulic fracturing, or fracking, the drilling technique that has fueled the shale oil and gas boom elsewhere but drawn opposition from many environmentalists.

Though oil companies have engaged in fracking in California for decades, the process was only loosely monitored by state regulators.

Environmental groups are suing the Bureau of Land Management and the Department of Conservation to prevent the opening up of further land to oil exploration and to enforce stricter environmental practices.

"If and when the oil companies figure out how to exploit that shale oil, California could be transformed almost overnight," said Kassie Siegel, a lawyer at the Center for Biological Diversity. "Fracking poisons the air we breathe and the water we drink. It is one of the most, if not the most, important environmental issue in California."